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Facts
The assessee filed an appeal against the order of the Commissioner of Income-tax (Appeals) for AY 2013-14, which arose from proceedings under sections 147 read with 143(3) of the Income-tax Act, 1961. The Assessing Officer had initiated reopening proceedings based on alleged cash withdrawals of Rs. six crores in October 2012, but ultimately made an addition of only Rs. 18 lakhs (3%) to protect the revenue's interest.
Held
The Tribunal noted that the original reason for reopening, regarding cash withdrawals of Rs. six crores, did not result in a corresponding addition, as only Rs. 18 lakhs was added. Citing CIT v. Jet Airways (I) Ltd., the Tribunal held that such a reopening, where the main reason does not lead to an addition, is not sustainable in law. Consequently, the reopening itself was quashed, rendering other merits-based pleadings academic.
Key Issues
Validity of the reassessment proceedings initiated under Section 147/148 when the original reasons for reopening did not lead to a corresponding addition.
Sections Cited
Section 147, Section 143(3), Section 148, Income-tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for assessment year 2013-14 arises against Commissioner of Income-tax (Appeals)-27, Delhi’ DIN and order no. ITBA/APL/M/250/2023-24/1059703688(1), dated 15.01.2024, in case no. CIT(A), Delhi-27/10189/2012-13, in proceedings u/s 147 read with section 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties at length. Case file perused.
It emerges at the outset during the course of hearing, and more particularly, from a perusal of the impugned assessment order dated 31.03.2022 that the Assessing Officer had sought to set section 148/147 mechanism in motion after recording reasons to believe regarding assessee’s cash withdrawals from bank amounting to Rs. six crores made in the month of October 2012 whereas he ended up only making addition of Rs. 18 lakhs i.e. @ 3% only in order to protect the interest of the Revenue. Meaning thereby that above sole reopening reason has not ended up in any addition. That being the case, I hereby quote CIT v. Jet Airways (I) Ltd. 331 ITR 236(Bom.) to conclude that such a reopening itself is not sustainable in law, quashed accordingly.
All other pleadings on merits stand rendered academic.
This assessee’s appeal is allowed in above terms.
Order pronounced in open court on 27.11.2024.